Judge seals list of Rothstein victims

August 11, 2010|By Jon Burstein, Sun Sentinel

A list of Ponzi schemer Scott Rothstein’s victims will not become public after a judge ordered Tuesday that the court document be sealed.

U.S. District Judge James I. Cohn’s ruling came after the U.S. Attorney’s Office asked that the list of 259 people or corporate entities be kept out of the public court file. Those victims are entitled to $279 million in restitution, according to federal authorities.

Federal prosecutors argued against releasing the list, saying that it would cause the victims “severe embarrassment and mental distress, impacting not only their privacy but their dignity as well.”

“Publicizing the names of victims of financial fraud provides a roadmap to future fraudsters of individuals who are most vulnerable to their schemes, and thus seriously compromises their financial safety,” wrote Assistant U.S. Attorney Jeffrey Kaplan.

Cohn agreed with prosecutors, ordering the names be kept under seal unless he’s provided a compelling reason for their release.

The restitution proceedings in Rothstein’s criminal case are part of a web of court actions attempting to recover money lost in the $1.4 billion Ponzi scheme, the largest financial fraud in South Florida history. Rothstein, 48, a disbarred attorney, is serving a 50-year prison sentence after pleading guilty to racketeering, money laundering and fraud.

Rothstein told investors they were buying big-dollar legal settlements in sexual harassment and whistleblower cases, but the settlements never existed.